In Hollywood, the land where dreams are made.
Charles C. "Drood" Drood (Tom Hulce) is a professional artist who makes his livelihood from cartoons. He has fallen asleep because he spent all the night working. Helen (Mary Elizabeth Mastrantonio), his ex-wife, calls him in anger because he forgot to pick his daughter up - a sweet girl called Elizabeth "Bean" Brood (Judith Barsi) C. C. is also trying to avoid his boss, who phones him to demand whatever work he had to finish up. If not, he'll be fired. At that moment, when he is trying to avoid him, is when his friend Jim Campbell (rock star Adam Ant) tells him that he has sold a piece of his artwork and that his comission is 500 dollars. When Charles meets Helen, he asks her to move in with him once again, as he is not that sure about their impending divorce. It's implied - but not seen - that she rejects the offer.
At school, during her daughter's break, CC talks to Bean. One of her young teachers talk to her, Mrs Margaret Bell (Rosalind Chao). She finds him amusing.
Some thugs pick CC up. They demand something from him, but nobody clarifies CC what it's expected of him. They kidnap him, beat him and scare the shit out of him. Charles goes to the police, who think he must have done something. The police asks him whether the name of a young woman called Yolanda Caldwell (Virginia Madsen) tells him something. Charles says that he's never heard of her. The police officer shows him a photograph of her, dead. Charles has a reminiscence of him having a warm sexual relationship with her. Det. Benjamin "Ben" Smiley (Harry Dean Stanton) and Det. John Gilbert (John Doe) question Drood about her. He admits he didn't attend a meeting with her, because after all he's still married and has a child, and he's trying to make things work out with Helen.
He tells how he met Yolanda - he questions her when he realises that he's got many drugs/pills in her handbag. She is a blonde bombshell, and flirts with him.
Back home, Charles' aspect is horrible: his face has been smashed to a pulp. His landlady, Mrs. Raines (Herta Ware), a hard-of-hearing old lady, gives him a package, and talks about a post office conspiration about mixing dates. He tries to convey to her landlady the message that he may leave the flat soon, but communication is impossible. In the packet which Charles has received there is a photograph of Yolanda in a sexy outfit having fun with several important grey-suited men, probably politicians.
Somebody has created a mess in his condo because they are looking for that photograph. A young man points at him with a gun to get it. Charles remembers how they were together, in a picnic on the top of a hill close to a high way but dressed to the nines. Ben is happy playing around, while her father is a bit melancholic. Helen is worried about the breaking-in in Charles' apartment. He tells her to chill out. Helen doesn't believe he's become mature at all. When Charles comes back to his flat, there is a funny conversation with Mrs Raines because she won't use a hearing aid, and she complains about the new lock on his door.
Charles Drood enters and starts making cartoons. However, he soon goes down to a pub, looking like a punk, buying shots for himself. Obviously, he gets drunk. The thug who vandalised his apartment appears out of nowhere and pulls his gun out again, threatening him in the toilets. Charles doesn't know what to do anymore. Charles paints, and the crime becomes his main inspiration. The police has organized surveillance of him and is following all his steps, he can only remember how worried her lover was during the last part of her life. He questions Jim about one party at which Yolanda was present, especially whether she went there with a Congressman. Jim says that she may have attended with somebody but can't remember whom with. Jim is at loss about Charles' intentions. However, Jim is cracking jokes and that gives Charles inspiration to go and look at her body in the morgue.
At the mortuary, - to which he goes with a ridiculous hat and dark sunglasses - he mentions that she was married but doesn't know the name of her husband. The perton who helps him makes a phonecall right afterwards he leaves the place without looking at the body in the morgue. Charles draws and draws about the situation.
His life goes downhill, from bad to worse. Little by little, he tries to investigate. She phones to a phone he found in a visit card. He phones and enquires about Yolanda. Shelly appears. It looks like she's a professional secretary, but she gets naked, as she is really a prostitute. He tells her to go away, but she won't, as she needs to earn her money. When she looks at Charles' artwork, Shelly calls her "Nancy", instead of Yolanda. Suddenly, Drood is interested in Shelly, and tries to get Yolanda's real name and surname. Shelly refuses. At that moment, Bean and Helen enter the studio, and they find Charles hugging the naked young woman. Helen won't believe anything that Charles says; in fact, she doesn't want to talk to him in her life again.
Drood tries to talk with Mrs. Raines. He enters her apartment, where she is deepley asleep. He looks around and realises that she has been nicking things from mail and packets from all the tenants in the building, as she is a nosy lady. As usual, she can't communicate with her, and he only suceeds in scaring her. When he comes back to his apartment, he finds "Shelly" dead. He has to run away once again - this time, he's found a photograph of some masked middle-aged men naked, presumably about to have an orgy with some of the prostitutes from Shelly and Virginia's agency. When he's about to talk to Smiley at the police station with that new clue, he recognises one of the detectives (Marty Levy) - who is celebrating Smiley's promotion - as one of the thugs who threatened him in the car at the beginning of everything.
Drood asks Helen for help, but she won't help him out. Charles has to almost break in because she won't even try listening to him. Helen was having sex with a young man. Helen tells him to go away. Charles decides he needs to see Bean, even when it's really late. He doesn't want to wake her, though, and is tender with his little girl.
The police are investigating Shelly's murder the following morning. Smiley questions Helen in her workplace. She works at a kindergarten and Drood phones him while she's talking to Smiley. Smiley and one of the detectives talk about framing Drood: either they will go down or Drood will.
Drood disguises himself: even his friend Jim can't recognize him. Jim is panicking. Helen is worried and Ben is having trouble at school: his friend accuses him of beng too selfish, too absorved with himself to worry about anybody else. Drood gets Jim's car keys with threats.
Nancy Barron was the secretary/office aide of Bobby Nye (Millie Perkins), a person involved with a city hall sex scandal. At a city hall party, Drood attends in disguise. An opera singer (John Fleck) is singing. A lady at the party recognises him, and presents Drood to several councilmen and their wives as an artist. Later, somebody says that lady's name: she is Bobby Nye. She comments that his work will rise its price as the model has passed away. The detective/thud appears, and he softly takes Drood away. Somebody had told him to hit Nancy/Yolanda, and he took things too far. That young man commits suicide: he is sorry that everything went overboard.
Drood phones Helen: she now knows she's innocent. Drood tells Helen to remember the number of their hotel room during their honeymoon. Droods asks her for money and new clothes. Drood is worried because Helen decides to phone Smiley to talk with him face-to-face, with the bait of telling him where Drood is hiding. We see Smiley's office: he used to be in love with Yolanda/Nancy as well.
Helen wants Drood to talk with Smiley. Smiley seems eager to help Drood. Detective John Gilbert appears and points his gun towards Drood. Drood shoots Smiley. In the ensuing fight, Drood kills John. Drood feels that he's a walking dead man. Helen panicks when an over-the-top maddened Charles Drood decides to kill himself. The audience knows that Helen is in love with him all over again.
Drood goes on his own way without Helen, advising to her that she say she was kidnapped by demented Charles. Charles Drood puts his rings on the fingers of the suicidal detective and plans to make his body pass as his own dead body. In order to do that, he must savagely take all his real teeth out, later putting his there. He sets fire to the car, who goes off in flames. Charles Drood will attend his own funeral in a disguise and being careful to hide away.
Helen and Bean, mourning Drood with long-looking faces, enter a car with a chaffeur.
Closer to the chaffeur driving away: it's Charles Drood.